Chancellor should keep it short and sweet

Mar 12 2008 by Bill Gleeson, Liverpool Daily Post

IT MUST be hard being Alistair Darling. He will have spent last night tossing and turning in his bed trying to becalm his basic instincts.

He very, very badly wants to tax us all more than he does at present – yet he knows he can’t. On the contrary, far from being able to increase taxes, he is stuck with a tax decrease forced on him by Gordon Brown in his last Budget speech as Chancellor a year ago.

You can hear Mr Darling muttering to himself, “basic rate tax of 20p, why oh why?”

It must be very difficult for him to curb his tax and spend instincts.

But these instincts are very strong and the lid can’t be kept on them all of the time. The proposal to tax “non-doms” and the rise in Capital Gains Tax are cases in point.

There is even some considerable justification for what he has proposed on both counts.

The new CGT rate of 18% may be higher than the previous rate of 10%, but it’s worth remembering that it was only a few years ago that entrepreneurs paid 40% on the sale of their businesses.

As for non-doms, they shouldn’t be treated any differently from anybody else who lives and works in this country.

Yet such changes allow Mr Darling’s opponents to create the impression that he is anti-business: that he is giving full vent to those tax and spend instincts.

And he knows this. Hence, he has a hard time trying to reconcile the competing demands on him.

And that’s why he will probably sit very firmly on the fence today. He will do very little other than make expedient capital out of the chance to remind us all about the tax cuts pledged last year.

Certainly, I hope that’s what he does, because if he’s got any other ideas we could all be in trouble.

Mr Darling’s first Budget speech couldn’t come at a trickier time. The country faces very uncertain economic times. Growth forecasts are being cut by all economic forecasters. It is a time for keeping things steady, not taking risks with increased taxation or spending.

There have been suggestions he is so hampered by circumstances he plans a world record short Budget speech of, say, 40 minutes. Let’s hope so. Keep it short and sweet, Mr Darling.

THE deal that sees Sir Tom Hunter’s private equity firm investing in land development in Norris Green is worthy of note.

As a piece of inward investment, its remarkable.

After all, Norris Green is usually only in the papers for the wrong reasons: drugs, crime, guns and the population leaving in droves.

Yet there must be some potential there. Sir Tom and his partners in private equity firm West Coast Capital are not a sentimental bunch. The figures must have stacked up for them to do this.

So what can these hard-nosed investors see that everybody else is missing?

Or have they underestimated the nature and scale of the problem?

West Coast’s investment is part of a joint venture with Liverpool City Council, who seem to have got the best part of the deal.

The local authority has nothing to lose. The land concerned was either vacant and idle or was home to derelict properties. The council has simply placed the almost valueless land into the venture instead of cash. Should there be a return, the council is straightforwardly in the money.

Not that any profit is likely to be made in time to solve the city council’s current budget crisis.